Business is part of the solution as world awaits COP21

As world leaders prepare to gather for the climate change summit in Paris next week, Mike Shirley looks at the implications for businesses.

Already being described by some as the world’s most important meeting for generations, COP21 has much expectation riding on it.

Lobbying ahead of the Paris event has been frenetic in recent weeks, with everyone from environmental think-tanks to religious leaders pressing world leaders on the actions they want to see to reduce greenhouse gas emissions.

The business community has also been very vocal, not surprising given what is decided could have significant implications as countries look to take action to meet potentially binding targets to reduce emissions.

Measures such as increasing carbon pricing, legislation to curb carbon intensive activities and more regulation to step up energy efficiency investment could mean higher costs and hit some industries hard.

Businesses urging radical action

But interestingly, many of the most influential voices in the business community are the ones pressing for the most far-reaching action at COP21.

That was highlighted earlier this week when a group of 71 chief executives from some of the world's largest companies urged global leaders to set their sights high at the conference.

They called for a strong set of clear policy signals to help accelerate a global shift to a low-carbon economy.

A ‘WeMeanBusiness’ coalition set up ahead of COP21 has also encouraged companies to make public commitments to measures such as adopting emissions reduction targets and procuring 100% of their electricity from renewable sources – a shift which we’ve really started to see gather pace.

There’s no doubt business is now far more visible in the climate change debate than it was before COP15 in Copenhagen, a reflection that it increasingly sees itself as part of the solution.

In fact, the Carbon Disclosure Project (CDP) recently reported that 89% of companies are taking concrete action to reduce greenhouse gas emissions compared to less than 50% before COP15.

Growing awareness of climate change risks

A growing awareness of the risks climate change poses to business is undoubtedly a factor in that.

Global warming and extreme weather conditions pose huge threats to companies and industries, from wiping out crop harvests to damaging electricity infrastructure. Businesses – and their investors - want to ensure they are both financially and environmentally sustainable for the long term.

But as well as the risks from climate change, businesses see opportunity from accelerating a shift to a low carbon economy.Many commentators see huge economic opportunity from what is effectively an industrial revolution where new industries and innovative solutions will emerge.

COP21 important, but maybe not the biggest catalyst for change

Hopes are high that COP21 will set the right direction for the world to achieve that shift. But although the decisions taken will have implications for all businesses, another factor is seen by business leaders as being more significant than any United Nations accord.

The vast majority of CEOs questioned by PwC cited growing consumer awareness around sustainability as the main catalyst for action on climate change in their sector.

That chimes with our own research earlier this year which found that 4 out of 5 consumers were more likely to buy from a consumer brand with a positive approach to sustainability.

Even if COP21 falls short of the legally binding agreements which many hope for, consumer clout looks set to help ensure the current momentum across business on sustainability continues to build.